The increasing dominance of the housing market in the British economy was revealed yesterday when the government released figures showing that 60% of the country's £6.5 trillion wealth was now tied up in property.

In its annual snapshot of the UK's financial and non-financial assets, the Office for National Statistics (ONS) said the cost of buying the country on the open market had risen by more than 5% - a £326bn increase - in 2005.

The ONS figures show, however, that the increase was more than accounted for by the market value of Britain's housing stock, which has risen by more than two and a half times during the property boom of the past decade. The Halifax, Britain's biggest mortgage lender, says the average cost of buying a home was well under £100,000 when Labour came to power but is now nudging £200,000.

By contrast, in 1948, the year when the run of ONS data released yesterday began, the average price of a property in Britain was less than £2,000. Adverts in the Guardian in July 1948 show that a detached house in Blackheath, London, complete with garden and orchard was on the market for £3,000. Today, potential buyers are looking at a price tag in the region of £1.5m.

By 1970, despite more than two decades of sustained economic growth, the average cost of a home was still less than £5,000. But since 1997, the scramble to get on the property ladder, a period of cheap money and the impact of foreign buying in parts of central London have combined to create the biggest boom in Britain's history, which has more than doubled the marketable value of housing in 10 years.

The ONS figures for the UK's capital assets indicate that measurable wealth is more than five times the value of the annual output of the economy, or gross domestic product. The report also shows that the wealth of the UK is now highly sensitive to movements in the housing market, particularly given the declining importance of manufacturing to the economy.

The ONS released figures yesterday going back two decades, which showed that the price tag on all UK assets increased almost fourfold from £1.7 trillion to £6.5 trillion. Over the same period, the amount it would cost to buy the UK housing stock rose from just under £900bn to just over £3.9 trillion. Within this 20-year period, however, the value of housing assets rose by a third in a single year during the 1988 property boom, then fell for three years in a row as negative equity and record repossessions dogged the market in the early 1990s.

By 1995, the cost of buying all UK homes was £10bn lower than it had been in 1989, the ONS figures show and property assets accounted for about 42% of the market value of financial and non-financial assets. This proved to be the end of the long slump in housing and the start of the boom that has continued unabated ever since. The market value of UK housing assets has risen from £1.42 trillion to £3.91 trillion since Labour has been in power - a bigger increase than the rise in the UK's overall wealth.

Illustrating the extent to which house prices have been forced up by speculation rather than by fundamental changes to the economy, the government data revealed that the cost of rebuilding every home in the UK in recent years has been rising at nothing like the annual double-digit inflation rate for house prices.

The ONS released figures showing the replacement value of UK assets going back to 1948 - a time when the housing stock had been badly affected by the blitz and there was a severe shortage of homes. At that time, according to the official data, the replacement value of financial and non-financial assets was put at £551bn, of which housing accounted for £228bn.

During the 1950s and 1960s, when house prices rose modestly, the replacement cost also increased slowly, in line with inflationary trends of the economy as a whole. When the cost of living shot up in the mid-1970s, the replacement cost of housing also picked up sharply. Similarly, when house prices were crashing in the early 1990s, the replacement value of housing rose as a result of inflation.

In 2006, the cost of replacing all the UK's capital assets was put at £2.6 trillion, of which £941bn would have to be spent on the housing stock. The replacement cost of bricks and mortar has risen by 15% over the past decade.

The latest report on the property market from Rightmove showed that house price inflation has slowed from a four-year high of 15% in April, but still stands at 10.3%. The national increase is being driven by strong demand in London, where prices rose by 1.8% on the month and by 21.7% on the year.